I made an offer and the seller REJECTED!

Wholesaling
10yFollow

I made an offer and the seller REJECTED!

Tiffany Cunningham
Investor · Bronx, NY · Member since 2015 · 11 posts · 1 vote
I found a property in a great neighborhood that needs tons of work. I mean at least 75-80k. The seller is acting on behalf of his mother. The property has been vacant and in unlivable condition since at least 2009, maybe before then. Long story short I did my calculation to get my MAO and it was rejected. I have room to increase my offer, however the work I've put in to find this property, the amount of phone tag that's taken place kind of makes me question whether or not I should do business with this guy. He's a used car salesman so he's been talking a good game and since I'm a newbie at this he's really getting to me. Raising my offer seems like it's the only way I could possibly get this house under contract. How does one deal with a rejected offer?
1Reply
20 views

Most Popular Reply

Tony Gunter
Investor · Canton, GA · Member since 2014 · 727 posts · 500 votes
10y
Your are getting emotionally involved with the property. Make sure they know how to reach you, but walk away. If they can't counter and it is not listed, your bidding against yourself. A better property/deal is just around the corner.
6Reply
See this reply in the discussion

16 Replies

Jump to latestLatest
  • Mike S
    Investor · Latonia, KY · Member since 2012 · 107 posts · 50 votes
    10y

    If you're at your max price tell him that's your best and highest and walk away.

    0Reply
  • Tony Gunter
    Investor · Canton, GA · Member since 2014 · 727 posts · 500 votes
    10y
    Your are getting emotionally involved with the property. Make sure they know how to reach you, but walk away. If they can't counter and it is not listed, your bidding against yourself. A better property/deal is just around the corner.
    6Reply
  • Roland Paicely
    Raleigh, NC · Member since 2011 · 721 posts · 343 votes
    10y

    Ask him what price does he have in mind.  If no progress then simply stay in touch with him.  

    0Reply
  • Linval T.
    Investor · Bay Shore, NY · Member since 2014 · 1k+ posts · 688 votes
    10y

    @Tiffany Cunningham

    @Mike S@Tony Gunter and @Roland Paicelyhave all made good suggestions. I will add to those comments by saying that since the property has been standing there since 2009, I am positive that your offer is not the first one that he has grappled with mentally and rejected in like fashion. So, don't sweat it or bid beyond what it's worth in your estimation.

    1Reply
  • Jason McDougall
    Rental Property Investor · Decatur, TX · Member since 2010 · 128 posts · 33 votes
    10y

    I agree with the others, ask him what price he had in mind, and if it's too far out of line with what you're able to offer, walk away. Consistent follow-up is key though, so it would be good to send him a text or give him a call a once or twice a quarter. Something will eventually have to happen with the property, and you'll be at the top of his list when he's more motivated.

    You'll get a lot of rejected offers, but some of them eventually turn into deals!

    Good luck!

    0Reply
  • Tom MolePro Member
    Investor · Sunland, CA · Member since 2013 · 260 posts · 240 votes
    10y

    @Tiffany Cunningham, I'm gonna go out on the limb here, but I suspect that you violated the cardinal rule of negotiation and you did it with a professional negotiator. Did you perchance start your negotiation with your maximum offer?

    I don't think the problem is the value of the property. This guy knows that Mom's house is a disaster. He just needs to get the best price possible. You said this guy sells used cars. If he's any good at his job, it's a habit for him to reject the first offer. It's in his DNA. He just can't say "yes" to the first offer.

    Most newbies tend to be timid about offering very low prices. If that's you, you're gonna need to get over that as quickly as possible. You may have to walk on this deal. The well may be poisoned at this point. Whatever else you do, never, never, never go over you MAO price. So, when is OK to offer above your calculated MAO? Never!

    Since you're not going over your MAO, you need to leave some room for negotiation. If you're initial offer is too low to get Mr. Seller interested, you DO NOT yet have a motivated seller, so go find one who is motivated.

    An offer MUST be an invitation to have a conversation. If your offer is accepted OR rejected without discussion, then you made a bad offer. If the seller doesn't counter your offer, then you offered too much, guaranteed, every time. If your offer is too low to stimulate a conversation, then offer a little more. If it's still too low, offer a little bit more. If you hit your MAO, move on.

    May I suggest a book you may want to read? Look for a book called "Getting More" by Stuart Diamond. If you read and practice it, you'll get a lot more deals accepted.

    Now, I did say I was going out on a limb. If I just crawled out onto the wrong limb, then ... never mind. Hopefully someone will find this post useful. 

    Any questions come to mind?? Feel free to contact me.

    Happy holidays!

    3Reply
  • Mark Brogan
    Investor · Roanoke, VA · Member since 2012 · 1k+ posts · 374 votes
    10y

    make your offer and stick to it if that is your MAO, put him on you return call list

    don't go higher just to get a deal

    good luck @Tiffany Cunningham

    0Reply
  • Devin Morgan
    Baltimore, MD · Member since 2014 · 91 posts · 49 votes
    10y

    I'm a newbie as well but I've talked to a few sellers. I always ask them upfront what it is they want for the house. Sometimes they'll say well what can you offer me? I say what do you THINK it's worth and what would you be willing to take for it. I find usually what they think it's worth is off or their comps are slightly elevated. I haven't closed a deal yet but I do find sellers think their house and sometimes neighborhood is worth more than what it is.

    But I will say this numbers don't lie. If he's not willing to come down and its your MAO don't try to make it fit. If it doesn't work it doesn't work. He's a car salesman. I read somewhere around here we don't get sold houses, we buy them.

    1Reply
  • Sterling WhitePro Member
    Rental Property Investor · Indianapolis, IN · Member since 2014 · 554 posts · 153 votes
    10y

    As everyone has stated above @Tiffany Cunningham stick with your offer or either walk away. Key in real estate is making money when you buy. I would not try to adjust the numbers to try and make things work.

    I will tell you that there are plenty of other deals in the marketplace. Just be patient

    Hope that helps

    Podcast Guest on Show #308
    0Reply
  • Jeff S.
    Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes
    10y

    For me the key point is the words "used car salesman".  For me that alone would kill the deal! I don't want to get into that level of mind games and manipulation.  But that's just me.

    I recently read (on BP) about the usefullness of a written letter accompanying your offer.  It's not to late to send a polite letter explaining all the things you like about the property, how you understand why the seller would (quite rightly!) feel the property was clearly worth much, much more, but your personal situation, unfortunately, limits you from going any higher.  You are sincerely interested in the property, and hope that its okay if you keep in touch, (blah x 3).

    Oh, and if this works, do you mind tossing me 1% of your profits? 

    1Reply
  • Jeff S.
    Colorado Springs, CO · Member since 2015 · 98 posts · 59 votes
    10y

    Oh, and another thing. IMO, used car salesmen are some of the most sexist "professionals" out there. You might phrase your letter in terms of "my business partner and I feel ...".  Make him feel like there might be a man involved.

    Apologies to all the used car professionals here on BP.  At least to the non-sexist ones...

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Tiffany Cunningham  I have not directly negotiated with sellers in many years. ( deals are brought to me already negotiated out).

    but when I did and you get the "what will you pay for the house" from the seller I used to do this:

    I would tell a story... the story of the person down the street that I just talked to and you know what they told me... We were talking price and you know some sellers bless their hearts just think their property is worth substantially more than it really is especially in the condition its in.  So When I asked what this other seller wanted he gave me a price that was 150k over reality... and I had to let them know that we probably won't do business but I wanted to mention it... Now talking with you I can tell right away your not like that and don't you think that other person was being a little unrealistic... I am sure your not that way correct... I mean you could tell me you want 250k for your home when you already know its only worth 100k.. your not like that right ?  so when I landed then it was the one's that said oh no I am not like that I know my house is only worth about 80k.. Or they would say ya I think my house is worth 250k when its worth 80k  at that point I would say well your being like these other folks looks like I will have to pass and keep in contact..

    I used variations of this for years. when I was buying all my pre foreclosure sub too's in ORegon  before the laws changed and its no longer legal to do so in the manner most people go about it. But that's another story.  But I ended up owning I think about 70 homes all sub too... my method was to rent back.. and of course the people flamed out usually within a year and I would rehab and resell... I never bought a sub too that did not have substantial equity day one after rehab.. .. if I took no equity deals I could have had 500 homes.

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    0Reply
  • Larry Turowski
    Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    10y

    @Tiffany Cunningham  As @Tony Gunter said, you're emotionally attached to the deal.  You need the strength to walk. 

    But don't feel bad. I still get emotionally attached too. It's hard to not to when you feel a deal is at the tip of your fingers but can't quite grasp it. The trick is to have enough deal flow that you can let those almost deals pass by and know there will be another.  Work on your deal flow. 

    Also, sometimes when a seller sees you will walk and they haven't got better options, they'll come around in a few weeks or months or even in a couple of years--it's happened to me. 

    0Reply
  • Jacqueline Carrington
    Investor · Corona, CA · Member since 2014 · 746 posts · 372 votes
    10y

    Walk away. There are plenty of other deals to be had.

    0Reply
  • Jeffrey Borstell
    REALTOR® · Andover, MA · Member since 2011 · 16 posts · 3 votes
    10y

    I deal with a great deal of home owners that own distressed properties. Timing is everything in these situations. I like to stay in touch with these people over the YEARS (yes that is right, sometimes the "RIGHT TIME" might be in a year or two). Do not lose your patience and check in with him a couple times as year. He will need the money eventually and will contact you when the time is right. Best of luck!

    0Reply
  • Paul Sorgi
    Real Estate Investor · Abington, MA · Member since 2011 · 356 posts · 114 votes
    10y

    All great replies above.

    Don't force the deal stick to your price and just follow up with him every couple weeks to see how things are going. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free